Archive for September, 2011

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Getting a better business insurance renewal quote.

Friday, September 30th, 2011

Ask anyone in the world of business insurance and they will tell you that getting new business is many times more expensive than renewing an existing policy. There are the upfront “acquisition” costs, marketing and time in providing the quotes and then there are the processing and compliance costs in actually getting the policy issued to the client.

To the layman, this may not seem like a huge amount of work or effort, but when you compare this to the work involved in issuing a renewal you’re probably looking at three to four times the cost for new business, compared to renewal. This would make you think that insurers would be keener to keep the renewals than target new business. Whilst the rhetoric from insurers follows this stance, the reality is that they still price new business more keenly than renewals. This is in the hope (which is proven) that once a customer takes out a new business insurance quote, a bit of complacency sets in and as long as there are not huge increases, the customer will renew.

For every hundred new policies they issue, all commercial insurance companies have percentage targets for the amount they want to renew. This means that they have percentage targets for the amount of business they are happy, or prepared, to lose. The ones we have worked with over the years will usually look for a renewal percentage of 75% on the number of policies, if they get 85%+ they are over the moon.

All of this leads to the fact that your existing commercial insurance renewal, is not always going to be the most competitive price available from your insurer. A little experiment is to just phone up your broker when you get your renewal (if it has gone up by more than inflation and index-linking) and ask them to shave a bit of the premium. Without even supplying an alternative renewal quote you can usually get 5% off just for making the phone call.

You do have to be careful though, you may have to prove that you have an alternative cheaper quote on the same terms and conditions, but it is always, and I repeat always, worth looking around at renewal if you have had an excessive increase. The next post will cover additional terms at renewal, which can cost you even more financially.

Posted in business insurance quote, business insurance renewal quote | Comments Off

What next for the UK general insurers?

Wednesday, September 28th, 2011

Anyone who has individual shares, or a plan with holdings, in any of the UK financial institutions will probably not want to be reminded of the last 6 months. The back end of 2010 and early 2011 saw a slow but steady rise in the share price. But, with the Eurozone and elsewhere in the world still nowhere out of the financial woods yet, shares have taken a hammering.

But does the overall share price of some of these companies have any effect on your business insurance premium, for example. In a word, in capital letters, that are in bold and flashing lights, the answer is NO. We have been trading now since the year 2000. We have seen the tail end of the dot.com boom, the panic in the financial markets following 9/11 and, here in the UK, the financial bubble that the Labour party inflated and inflated from 2002 to 2007. After this fell apart we saw shares in some of the bigger UK insurers plummet and whilst they recovered during 2008, 9 and 10, many are not far off their early to mid 2008 figures.

The good thing is that these companies are so large and many so diverse, that the stock markets valuation (in its loosest possible sense) of their company has no effect whatsoever on the premiums they charge. And there is logic to his. The great Warren Buffet bought an insurance company because it had such a substantial “float” in the form of premium. If a companies share price is hit, and they try and increase this float too much, through increased premiums, one of two things will happen.

If there are competitors doing the same thing, then thay can follow the same wave as the market (in terms of premium income) increases. If however they are doing this on their own, then what tends to happen is that the compeititon cherry pick the best, at good premiums, and the company that are trying to increase only get to keep the dross.

All types of covers, such as pub insurance, are subject to fluctuating premiums throughout any year, but an increase of more than 5% is not going to be stomached by many punters in the real world.

Posted in business insurance, pub insurance, pub insurance quote | Comments Off

Public liability insurance – territorial limits

Tuesday, September 27th, 2011

All commercial insurance policies will contains clauses, conditions, warranties, terms and definitions. Without these, brokers, insurers, businesses, lawyers and judges would spend forever disputing, defining, disagreeing, agreeing the minutiae of what is covered and what is not covered. Even with the policies we have in 2011, even after years of “Plain English” type campaigns to make wordings better to understand we still have these debates, day in and day out. The point about these is that, without the majority of the wordings being clarified in this way, it is very difficult to know what your policy gives you.

The flip side of this coin is that it is very clear, in most cases, whether cover does apply and where it applies. Every single business insurance quote we provide details the sums insured, declared figures and limits of indemnity, as well as a summary of the cover. A basic summary can be 20 pages long, so you can imagine how long the actual wording is.

This is why it is so important that when you get your quote, you read through it from start to finish. We have to say to customers, when we issue their policies, that these must be read through from start to finish. We understand that siting down and reading through an eight page policy in it’s entirety, and actually understanding it, is something that not everyone is going to have the time to go through. But, reading through a quote and summary of cover is something that falls under the category of achievable.

Public liability insurance is important as it covers you for damage you may cause at third party premises. You need to make sure though, that if you are doing any work outside of the UK you are covered. Most UK policies will have a territorial limit definition which will be for UK mainland, Northern Ireland and the Channel Islands. You need to specify if you are doing work out of the UK and your policy will need to note this.

As an example, we have a customer who imports and supplies gift items. They were attending an exhibition in Paris, when their stand fell and hit a neighbouring stand. The long and short of it was, that they had a claim settled for around €12,000. The UK commercial insurance company dealt with the French insurers of the third party and it was settled very quickly. Without this cover being in place, it would have been very costly and even more time consuming for our customer to settle such a claim.

As we always say, speaking to a business insurance broker is the way forward if you want to get the right cover, at the right price.

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Employers liability insurance – checking it is in force.

Monday, September 26th, 2011

Employers liability insurance is one of our most regular topics we write about. It is one of the few covers that, in the UK, there is a legal requirement to have. The difficulty is that there is no real, robust, definitive process for checking whether this cover is in force.

It would be a lot easier if, for example, all businesses traded as limited companies and some form of central register could be created. There is a database in existence for motor insurance, whereby the insurers have a requirement to notify the motor insurance database of any insurance cover in place for vehicles. Any amendments, alterations or changes need to be updated very quickly. This way the various Police forces can tap into this central database and check whether a vehicle has adequate cover. This is also tied in with the ANPR (automatic number plate recognition) cameras. If a car, which the database says does not have insurance, drives past a Police car with one of these cameras, the it is immediately flagged up.

However, you may have noticed that we say, “if the database says”. This is where there are some problems with the information not being updated. As a business insurance broker, we do get involved in three way conversations where the Police have stopped one of our policyholders as the insurers have not notified the motor insurance database of a change of vehicle. We always get there in the end, but it can take a good few hours out of your day unnecessarily.

Employers liability insurance is no as easy, because the more astute of you will realise that businesses do not simply trade as limited companies only. In addition, you can have plc’s, charities, sole traders with employees, partnerships with employees, not for profit companies, limited liability partnerships and literally dozens of others. The Health and Safety Executive do their bit when they undertake physical, on site, inspections of businesses. In reality though, these visits are decreasing and there are a whole host of other things that are potentially more important to check.

A proper, robust, usable database is many years away. In the meantime, if you have employees, just make sure that your business insurance quote includes cover in the event of injury, illness or disease to them.

Posted in business insurance broker, business insurance quote, employers liability insurance | Comments Off

Business insurance – direct debit options

Saturday, September 24th, 2011

We are getting a number of calls from customers, seeking new business insurance quotes, who have had to look around mid-term for an alternative insurance quote. The reasons are because there have been problems with their direct debits and their current insurers are refusing to continue the policy because of a couple of defaults. There is a cost, administration wise, for insurers dealing with defaults. This has resulted in more and more deciding that it is not worth continuing a policy if there have been a couple of defaults.

The reason for writing about it is that the customers have not really had much choice in the defaults, even if it is due to their bank accounts changing numbers or some other administration reason outwith the insured control, they are just giving 7 days notice and cancelling.

You just need to be careful that if an insurer threatens cancellation, that they probably are going to follow this through unless you speak to your bank and sort things out. The other end of the scale is that we have just had someone complain that we have cancelled their insurance unnecessarily. They were out of the country for three months, not answering mobiles, texts, emails or post and had defaulted four consecutive months. We tried as much as we could to hold off the insurers cancelling but in the end, they were going to charge us the four months premium. So we had to cancel this. The client was incorrect to expect us to hold this open for a third of a year.

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Getting a business insurance quote – the best way?

Friday, September 23rd, 2011

I had the misfortune to have to use an online business insurance quote comparison site. I shall not name names, but there was a reason for me having to use it. One of our existing clients, who we have worked with for around five or six years, sought an alternative premium at renewal time. They had a new employee who said that they could save money by looking around.

The problem was, that they chose to do this online, with no human interaction. It is a small office policy that we cover for them, they have a single location and £20,000 of servers in a secure central London location. We offered renewal at a very reasonable premium of £2,055.97. As we have mentioned in previous posts, we are conscious of the need to treat customers fairly at all stages of our relationship with them, which includes renewal. I sought three alternatives, one insurer wasn’t prepared to cover the servers at a 3rd party location and the two others were nearer to the £2,500 mark. I received a call from our contact who said that they had a quote for £1,600.00. Although they did not come out with it, there was the underlying message that they felt we had been overcharging them as they had managed to get a quote at 20% less. Managing the situation as best I could, I bought a few hours to respond. This was when I found out that they had got an online office insurance quote from a comparison site. When I asked for and received the quote, I was a bit angry to say the least.

The new employee had tried their best, but the quote they received did no offer accidental damage, did not offer portable equipment cover (ie laptops) and more importantly did not mention the servers. I got their permission to phone and discuss the quote. During the discussion I visited the website in question, you had to actually check the summary of cover, in a different pdf file, to see that accidental damage cover was not included, unless you asked for it. After making all of the relevant changes, the quote was £3,000 plus.

This was a result for us, the customer realised that the personal service you get from a human being who is also a business insurance broker, makes all the difference in the world. These online sites are the bane of my business life. They sell on price alone, with cover being secondary. How you can offer a business insurance quote without accidental damage is beyond me. The problem will be, if customers try to make a claim and this is then turned down, it is the industry as a whole that gets tarred with the same brush.

Businessinsure, as you can probably guess, can offer you a competitive office insurance quote, with accidental damage cover.

Posted in business insurance, business insurance broker, business insurance quote, business insurance quotes, office insurance, office insurance quote | Comments Off

Insurance renewal premiums – what the insurers think they can get away with.

Thursday, September 22nd, 2011

As a business insurance broker, we do not sell any house, car or other “personal” insurances. As a result of this, we have no option than to go to the market for our own personal policies. This is not a bad thing because we get to see what is going on in the outside world.

My home policy is due for renewal later on this year. I took up an offer with a building society last year, who I shall not name, given what happened. I moved to them as I have an account with them and in 2010 their premium was £417.00. This was reasonable and the cover was pretty good for the price. This years renewal offer came in the post at £526.00. I only know what I paid last year because I had to phone up and ask them. I received a six page letter from them, explaining that I had no claims discount and a discount for my house and contents being done together. What it did not say (which really frustrated me) was what I paid last year.

Businessinsure always let you know what you paid last year and/or whether there has been an increase. The letter I received for my policy had nothing of the sort in it. The thing that annoys me is that as an industry, we tend to get tarred with the same brush. If this happened to someone else they would probably just tut and say that is what you expect from insurers. This is not the case though. We are very proud of our pricing at new business insurance quote stage but we are equally as proud of the work we do at renewal. We have to, and do, treat customers fairly at every stage of our dealings with them. This involves making sure we offer the very best cover AND premium.

For my renewal, I thought I would give the insurers the opportunity to let me know why the premium had gone up. This is why I cannot mention their name. Their representative on the phone said to me “You are lucky it has only gone up by 25%, most insurances are increasing by over 40%”. And that, as they say, was that. He honestly believed that was the best sales line. We are close enough to the industry to know that for certain classes, double digit percentage increases are being applied. But in the main, if you have not claimed and it is not a motor policy, then you should be only expecting an increase of around 5%. Any more than this, and you should be taking the opportunity to llok around.

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Employers Liability Tracing Office – what do you need to do?

Wednesday, September 21st, 2011

As a business insurance broker, earlier on in 2011, we found out about the new steps that the insurers were taking to allow ex-employees, or current employees, to find out who were the employers liability insurance company for businesses in the past.

This new scheme is ELTO, the employers liability tracing office, is designed for just this purpose. The problem we found was that insurers were not following a co-ordinated response. If we look back to when insurance premium tax was first introduced in October 1994, we knew at least 6-9 months before what most insurers were going to do. Then from the 1st October we had to simply adapt and operate under the new regime. To give an example of how dis-organised some insurers were, one of our main insurers came into see us in May and I asked them about ELTO. Their first response was, what does that stand for? They did not have a clue and to be honest, as we hit the end of September, they still don’t.

So what is required from your business and more importantly when? You will, for every existing policy and new business insurance quote, from 1st April 2012 have to provide the Employers Reference Number, for your insurers to provide cover. If your insurer is not signed up to the ELTO, then it will not matter. But, we are not expecting any insurers that are authorised and regulated by the Financial Services Authority, in the UK to not be signatories to the ELTO by the time next April comes around.

You cannot not provide this information. It is not wanted for anything other than to help employees who suffer an illness, accident or injury, either whilst employed or way into the future trace who was the insurer at the time. If you look at the miners or people that worked with asbestos in the 60’s and 70’s only realised 20 or 30 years later that they had some serious, life threatening, illnesses.

Your broker or insurer should explain why they need this information, it is for a legitimate reason.

Posted in business insurance broker, employers liability insurance | Comments Off

Salon insurance – adequate cover for stock

Tuesday, September 20th, 2011

Salon Hairdressing and beauty salons, along with many other types of business in the UK, have had to learn the hard way in recent years and adapt to survive. There are very few “pure” hairdressers trading around the country. Walk into any ladies or unisex salon and you are more likely to find displays of products, shampoos, lotions and conditioners for sale.

I have been involved in the supply of salon insurance policies for over 20 years. Back in the early 1990’s, you would be lucky to have a stock sum insured of a few hundred pounds. This was purely to cover the stock in trade. Most hairdressers and barbers simply stored the stock they used in the shop. If customers wanted to buy anything, this was sold to them in a normal retail sense. Then, as time went by, more and more salons realised that the stock they used was not normally available in the supermarkets or chemists. They started to increase the ra nge of stock until you would normally find one wall, in the reception area, stacked full of stock for sale. This meant that stock levels, and the sums insured, started to increase. As these items were stored at the front of the shop, smash and grab thefts, whilst not a big problem, did increase.

Over the past 5 years though, the type of stock sold has increased from expensive shampoos and conditioners, to curling tongs, straightening irons and hairdryers. These items, whilst you can pick up for a fiver in some supermarkets for the value offering, are top of the range. Whilst the salon may not physically own the stock, because the manufacturers supply it to them and only collect money for what is sold, they may have a responsibility to insure it.

It is therefore important, that when you are speaking to your business insurance broker (because this is the only way to get the right product at the right price) about your renewal, that you ensure that the stock sum insured is reviewed correctly. This must represent the maximum replacement cost of the stock that you have a legal (as in you own it) or a contractual (the supplier says you must cover it) responsibility to cover.

Smash and grabs are increasing. A thief that can smash a window and walk away with three or four straightening irons is going to cost you a fair few pounds to replace. But, you do not insure for the maximum possible loss, you need to insure for the cost of all your stock. Otherwise average will apply. This means, in simple terms that if you under insure, then your claim will be under paid. If you have £10,000 of stock, but only insure for £1,000, then any claims settlement will be for 1000/10,000 (one tenth) of the total cost. This applies to the claim, whatever the size. So if you lose the three or four straightening irons mentioned, then you do not get a claim settlement of £400, you only get £40.

This is something you need to understand when looking for a business insurance quote, particularly if you choose to look online, because you will not get any advice or help when using a comparison website.

Posted in business insurance quote, salon insurance | Comments Off

Business insurance – timescales for a quote?

Monday, September 19th, 2011

When looking for a business insurance quote or any other service online, there is a certain expectation of a speedy service. If you purchase a physical product, you expect there to a be a delay as the product has to be dispatched and posted or couriered. You cannot physically expect a delivery on the same day unless you are within a similar geographic locality. But, when purchasing a service you can potentially get something delivered very quickly because it is not necessarily a requirement that you have a physical product.

For example, with your business insurance, if you know that you have cover in force then this will usually be enough to satisfy you until such time as you receive the policy in the post later on. So what can you expect, for example, if you submitted a form or phoned for a quote at 10am on  a Monday morning? We will answer this question based on the enquiry being for a packaged product, for example a pub, shop, hairdresser, office or similar.

When we receive a phone call, we would normally spend up to 10 minutes gaining the required information. We have to provide a quotation to customers that, in our professional opinion, covers their Demands and Needs. Whilst we can only base our response on what information we are actually provided with, we have to work on the basis of giving them the best cover for the best premium. Once we have undertaken our fact find process, we are then able to approach our panel of commercial insurance companies for a quote. We were saying earlier on about expectations of time. The fact that most, not all, insurers have some form of autoquote facility online makes our job so much easier. We can, in the majority of package cases, get a quotation within ten or fifteen minutes of that first phone call. We do however give ourselves leeway so that we can refer back to insurers for a more competitive quotation.

Give or take, you should be able to send and receive and get an email from us, with a fully compliant quote, within one hour of first picking up the phone to us. Of course, some cases will involve much more time and we will always let you know the estiamted timescales for turning around a quote. As always, phoning us is the key as you get to speak to an independent business insurance professional.

Posted in business insurance, commercial combined insurance, commercial insurance | Comments Off

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